Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
50% - Moderately

Common Stock

Synonyms:common share, non-voting share, non-voting stock, ordinary share, ordinary stock, voting share, voting stock
Acronyms &
Filed Under: financial-banking, investments, legal-contracts
Tags: investment, stock market

Definition of common stock (CS)

common stock (CS)
1. A type of security that denotes partial ownership in a corporation, but "common stocks" are distinct from "preferred stocks" in that common stocks are paid dividends after preferred stocks. Likewise, in the event of the corporation's bankruptcy, common stockholders receive debt repayment after preferred stockholders, which oftentimes leave common stockholders with little or no compensation. Common stocks usually provide the stockholder voting rights on certain matters ("voting shares"), but some common stocks have a non-voting class of stocks ("non-voting shares"). Also known as "common share," or "ordinary share."

Related Terms and Acronyms:

  • corporation   A legal entity that is legally separate from its owners and employees.
  • equity   The value of a property minus outstanding mortgage debt and other liens.
  • investment banking (IBK)   Bank operations that manage a bank's funding position, as well as its holdings of Treasury bills, bonds and preferred and common stock.
  • preferred stock   A type of security that signifies part ownership in a corporation and is given preferential treatment over common stocks.
  • privately held company   A company that is not listed on a stock exchange.
  • publicly traded company   A company that is sold on a stock exchange.
  • return on equity (ROE)   A ratio that shows how profitable a company is when compared to shareholder equity.
  • secondary market   A market where financial instruments such as stocks, bonds, options and futures are bought and sold to investors.
  • security   A tradable financial implement that represents ownership, the rights to ownership or debt.
  • stock   A share of the ownership of a company.

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